Can A Nation Really Go Carbon Neutral?

Cities, companies and even Scandinavian rock festivals are striving to cut carbon emissions to zero, what's known as carbon neutral.

Analysts are divided, however, on whether such a goal is achievable or even appropriate in fighting pollution and climate change.

Being carbon neutral means balancing out any carbon emissions by reducing them elsewhere. A country, for example, could plant swathes of trees to suck up the carbon put out by its factories.

Christian Steen

The Maldives

The Maldives is the latest country to pledge a carbon neutral target, with President Mohamed Nasheed claiming the small cluster of Indian Ocean islands can reach the goal by 2020.

Monaco began the race between countries, but set no date for completing the "Carbon World Cup," as United Nations calls it. New Zealand and Iceland also made pledges without giving a timeframe.

Norway and Costa Rica have given themselves a firm deadline. Norway is aiming for carbon neutrality by 2030 and Costa Rica by 2021, leaving the Maldives with the nearest deadline.

Maldives Leads 'Carbon World Cup'

The Maldives, an archipelago of two dozen atolls in the Indian Ocean, is banking on the anti-carbon race for its livelihood and perhaps even its very survival.

When President Nasheed upped the stakes it was partly intended as a challenge to the rest of the world. He said he hopes that by getting every country on board for a carbon neutral future he can stop the rising sea levels that he says threaten to engulf the nation's atoll structure— coral reef islands that encircle a lagoon.

“If the world can’t save countries such as the Maldives today, we won’t be able to save places such as London, New York or Hong Kong tomorrow,” he said in a statement when announcing the country’s target.

The Maldives is one of the lowest lying countries in the world—and presumably one of the most at risk of rising sea levels resulting from melting ice in the polar regions—but not all agree with claims that the Maldives is on the brink of a watery end.

The International Commission on Sea Level Change launched a project investigating the sea level around the Maldives and concluded its waters hadn’t risen for half a century.

The former chairman of the commission, Nils-Axel Mörner, is also widely reported as saying that any increase in sea levels over the next 100 years would not be more than 10 cm (four inches).

Ahmed Zahid

The Maldives

The UN's Intergovernmental Panel on Climate Change predicts sea levels will rise by 59 cm (17 inches) by 2100, and the Copenhagen International Climate Congress last month predicted sea levels will rise 99 cm (39 inches) in the same time.

If the Copenhagen congress is right then much of the Maldives would indeed be under water within a lifetime. But would the race to carbon neutrality help avert the climate disaster?

Many experts have said that reducing emissions of carbon dioxide would stem the environmental impact and that a carbon neutral future is the only way to stop future problems.

“Stabilization of climate change at safe levels will require drastic cuts in carbon dioxide emissions, with decreases on the order of 80 percent or more," Dr Chris Huntingford, a climate change researcher at the UK Centre for Ecology and Hydrology, told CNBC.com. "To stabilize climate over the next century the entire planet will have to become almost carbon neutral.”

“There is no doubt that many lessons learnt from the Maldives experiment will be of use to society at large, informing future more large-scale attempts to reduce carbon dioxide emissions,” Huntingford said.

Offsetting or Carbon Scams?

Some experts believe that certain policies are cutting dangerous corners in order to pull ahead in the race.

Norway’s pledge has come under fire, as it relies heavily on offsetting carbon emissions by paying for carbon-reduction projects in other countries. Even though this fulfills the basic premise of carbon neutrality, the offsetting activity happen outside its borders.

Offsetting relies on the business of carbon trading, which has seen a significant boom over recent years. The value of carbon trades rose to about $64 billion in 2007, according to an annual review from World Bank.

The market allows the buying and selling of permits to produce carbon dioxide, which are issued to companies that consume large amounts of energy. If the company needs to emit more carbon dioxide than it has been allotted, then it has to pay for more permits.

Countries looking to cut their emissions can gain extra credits by funding greenhouse gas- reduction schemes, like wind and solar energy projects, in poorer countries. This could give countries a carbon emission reading of net zero, even if their domestic emissions had increased year on year.

“When the idea of carbon neutral involves offsetting it can be very negative,” Larry Lohmann, co-director of Corner House, a UK-based environmental think tank, told CNBC.com.

Many so-called carbon offset projects were either already planned or being built, meaning the benefits would have happened anyway, according to Lohmann.

Other projects, such as ethanol production, have led to the destruction of forests and vegetation, which is not good for the climate, he added.

“There is one clever scam after another to produce carbon credits, but so far we haven’t seen much ingenuity going into projects that are actually helpful in getting us off fossil fuels,” he said.

Changing Energy Use

Despite criticism of offsetting and the carbon trading scheme it relies on, many policies introduced by governments do seem to signal a move away from fossil fuels.

For example, New Zealand aims to generate 90 percent of its energy from renewable sources by 2025 to help fulfill its pledge. And some participants in the market see it as the most effective way to make the huge changes needed to go carbon neutral and combat climate change.

“Carbon emissions trading is one of the most important tools for policymakers to use to address climate change,” Abyd Karmali, managing director, global head of carbon markets at Merrill Lynch, told CNBC.com.

“It has the ability, when implemented correctly, to provide a strong incentive for polluters and investors to allocate capital to low-carbon technology,” he added.

The main alternatives to carbon trading are “command and control regulation and taxes,” which are a blunt instrument and a more expensive way of achieving emission reductions, Karmali said.

Even if the carbon trading is the best tool in averting climate change, many analysts agree that it can’t work in isolation and there needs to be a widespread change in energy consumption if carbon neutrality could ever be achieved.

“We need to change the structure and the way we think about energy … We’re going to have to reduce energy consumption as well as finding other energy sources," said Lohmann.

Energy efficiency, renewable energy, and in some cases nuclear power have critical roles to play, Karmali said.

“Achieving global carbon neutrality is a huge challenge that will require widespread implementation of zero-carbon technologies, particularly in the energy sector,” he added.